1. Attract With Value

The appeal of a loyalty program is largely based on added value (whether actual or perceived) for customers. It’s the difference between them enrolling in your program or a competitor’s. Nowadays brands have the possibility, with data mining tools or customer surveys, to better know loyalty members and their needs. They can, in turn, more easily define what will be of value to them. A good example is that promising 5% off on a purchase is sometimes less attractive than great services, depending on the business. You have to choose your incentives wisely, and adapt it to your targeted audiences.

Patagonia, an eco-friendly outdoor apparel company, realized that their customers needed more than just points and discounts from a loyalty program. The brand has developed, in partnership with eBay, an event to help them to resell their highly durable clothes. It was a great success because it matches perfectly with their brand values.

2. Make Customers Compete

When companies succeed in enrolling customers into the loyalty program, they then have to maintain in them the feeling that they are part of the brand life. It’s why those programs have to be graduated. Customers have to be challenged to obtain a better status and unlock even more valuable rewards. That puts them in competition with other members, and so engages them in a recurring relationship with the brand. This strategy is based on frequent flyer programs, but has to be adapted to each particular audience. The game has to be developed digitally, be personalized and go beyond the simple purchase recognition; this is what drives Generation Y.

For example, GoPro, the versatile camera producer, is currently inviting their social media followers to subscribe to a daily lottery. The goal is to collect data about its fans and also to acquire new ones, further building its community.

3. Social Media Strategy

Social media presents a great opportunity for brands to build a community and to make loyalty programs enter the customer’s daily life. Facebook is recognized as the most powerful because of the number of registered users. But depending of the business, the social media strategy has to be adapted, and can’t rely solely on daily Facebook updates via the fan page.

Warner Bros has developed, with its My Warner apps, a good example of this three-step strategy. Based on social media, fans are rewarded for every interaction they have with the brand that builds community. For instance, liking or sharing content earns them points that can be redeemed for DVDs, goodies, or preview event invitations. Rewards are valuable and attainable for customers, the gamified experience makes them compete to be invited to the best event, and it builds community. But even if at the moment they’re focusing on Facebook, they may think that in the near future about putting more effort into YouTube and Twitter.

Adapted to Generation Y, these three steps will help brands build a successful gamified loyalty program.

Ever heard the quote: “Life’s a game, all you have to do is know how to play it”? Sure you have. But who would have guessed it would become the battle cry for an increasing number of companies. At least that’s the way it seems with all the buzz about gamification. Enterprises far and wide are now hoping that adding game mechanics to interactions with employees, customers, and prospects will drive engagement and energize business results.

As a matter of fact, Gartner research predicts that 40% of Global 1000 organizations will use gamification to transform business operations by 2015. Venture capitalists have also gotten into the act pouring millions into leading gamification technology companies like Badgeville, PunchTab and BunchBall, No wonder Gartner is also forecasting that gamification will be a $2.8 billion market by 2016.

Why does gamification work?

The answer comes from how we (as humans) are motivated by incentives. Offer your cube-mate the right incentive to do something, and don’t be surprised when he actually does it. And the best incentives tap into the wide range of our emotional needs and desires. For example: our need to improve our status, be acknowledged, express ourselves, and (of course) win. Mix-in game mechanics such as rules, point systems, leader boards, badges, and things start to get interesting fast. Done right, even boring work starts to get fun!

Gartner further points out: “gamification can actually change brain chemistry, stimulating dopamine, the brain’s feel good neurotransmitter”. That means gamification can truly influence the behaviors of customers and employees by changing how they feel. Do this at scale and you can radically transform how your company performs. We’re talking game changer. That’s the idea anyway.

Technology is making gamification possible

While the notion of gamification has been around a long time, the challenge has been how to “gamify” an organization and its many customer touch-points. Not anymore. Today’s gamification technology platforms enable companies to snap on game mechanics to processes and interactions that employees and customers already leverage other technologies for. Including incorporating how people interact with your company’s website and social properties like Facebook, Twitter, and Google+.

Bingo! New employees get cool t-shirts for crushing training programs, website visitors earn points for tweeting-out content; and community members get stickers for answering buyer questions. And gamification technology tracks who does what, how often, and when. So now it’s a piece of cake to figure out who should get that awesome prize for coming up with the “idea of the day”!

Is gamification right for your company?

Well that depends. Like all new technology initiatives, gamification offers plenty of potential but can also turn into eye-rolling and career-risking frustration. No surprise then that Gartner says 80% of gamification implementations will fail by 2014. Why? Because not enough thought will be put into how to design and “tune” game mechanics for a given company’s culture, target audience, and desired objectives. Simply put, if the game aspects suck then no one will want to play.

With that in mind, here are seven questions to consider before yelling “game on!”:

• Who is your target audience? This could be your customers, employees, website visitors, prospects, free-trial users, etc. The more specific you can be the better.
• What are your overall goals and objectives? Looking to deepen customer loyalty? Encourage more employee participation? Foster engagement with your products? Build brand awareness about a new service? Understand the goals your trying to achieve with gamification.
• What actions do you want to encourage? Make sure the actions you want are closely aligned with your goals. For example, if you want more customer loyalty then offering an incentive to answer prospect questions, share offers, and cough-up product feedback may all make sense.
• How will you gauge progress? Which metrics will you use to judge and value the performance of your gamification initiative? If you want to mobilize employees, then maybe it’s the level of participation or engagement that should be measured.
• What types of rewards are you planning to offer? Incentives and rewards must be closely aligned with who your target audience is and the actions you’re looking for. If not, then your gamification implementation will be doomed to fail (sorry!).
• How will you promote the program? What methods will you use to get the word out about your gamification initiatives? Promote it on your website, company-wide emails, build it into your product experience? It’ll be hard to get everyone playing if no one knows about the game.
• What’s your budget? Depending on your gamification plans, your budget may need to include: promotion expenses, reward costs, creative work, and technology platform fees.

Here’s another key piece of advice: start simply and get expert help (you’ll probably need it). Otherwise, be ready to roll-the-dice that your gamification implementation will be part of the 20% that Gartner says will succeed.

Want to learn more about gamification and how to engage digital consumers? Check out the Get More Engagement blog.

[Note: this post first appeared on Get More Engagement which covers engagement marketing trends, tips, and advice.]

Brands need gamification:

Gamification has demonstrated proven success for retailers and providers of social games. Statistics show that gamified experiences can deliver a:

• 50% increase in conversion from anonymous to registered users.
• 370% increase in time spent on the website.
• 600% increase in clicks to the shopping cart.

The Farmville success story, a game that put users in digital farmers’ boots and boasts 31 million daily users, is another strong example of gamification.

There are good reasons to gamify brands interactions with customers within the context of loyalty programs. It helps differentiate them from others brands. It also engages customers in a recurring win-win relationship, and it simplifies loyalty programs rules into basic game rules.

During the holiday season, FNAC, a specialized French retailer, launched a family web-game called WonderFnac to engage their customers in a digital gift-chase. Top players were selected and rewarded with high-tech products. It had experienced great success with more than 110,000 games played. Thanks to this, the retailer was able to enrich its customer database with new customers and more qualified data about its members.

Enter the virtuous circle:

With three major steps, marketers can transform a new customer into an ambassador:

1. Rewards to attract.
2. Gamified loyalty program to retain.
3. Community building to recruit.

Tangible rewards continue to attract people as the first step; there must be a high perceived value to attract new members.

Then the idea is to bring out the competitive side of customers and to use advocates as recruiters to attract their social circles. Marketers have to forget traditional gradual loyalty processes, and make members compete for the best loyalty status.

Those implementations have to be coupled with a robust and actionable analytics and reporting engine to adjust programs as needed. Indeed, those programs are based on viral trends and this volatile generation becomes bored easily. Those programs have to be flexible so that they continue to engage members over time.

Generation Y is becoming more and more powerful. They are becoming young dynamic executives and now make good money; they represent the next loyal customers for other products of the brand. They are sensitive to gamified experiences, and then they have to be targeted that way. Thus, the earlier brands attract them into the virtuous circle, the greater number of ambassadors they’ll get.

First, be unique.

A loyalty program that relies on points and plastic cards can get lost in the shuffle. Your loyalty program, just like any marketing or advertising should be relevant and engaging. A brewery that does engraved mugs instead of loyalty cards is a great example of how your program can be relevant to your company’s offering. And the program should engage your customers in a way that not only pushes promotions, but opens up the dialog and shopping experience to engage in a deeper, more meaningful interaction. Focusing on the “Why” of your company is a great way to instill deeper value and loyalty. Loyalty programs, are not loyalty creators. They allow you to measure the activity. Your messaging and efforts behind the program are what create loyal customers.

Make it measurable

If you do anything with a loyalty program, you should have the ability to collect lifecycle metrics on each of your customers. At the end of the day, if you can not calcualte LTV, or sales inside your loyalty program, you are wasting time. Every interaction and sales that customer makes should be tied into your program. Loyalty program are one of the greatest cohorts a company might ever have of measuring customer return. There are a number of tools that give you reporting, but at the high-level, you need to be able to pull demonstrate the active return in referrals, LTV, NPS, and return ratio on reach measures.

Do more than discounts

Loyal customers are created on more than price. In fact, loyal customers are the ones who are most likely to not care about price in selecting a service.  So why make the carrot on the end of your loyalty stick a discount? You can explore some feedback here, but in most cases the intention is to build value, and you can do that by giving more, not taking away. Find ways to increase what you give to customers, not just take away from your profits. Think outside your box. Even if you sell tires, it does not mean that a gift card to a restaurant would be a irrelevant reward. In the pursuit of being memorable and unique, your rewards can be a big help.

Creating a loyalty program for any industry starts with the intention of making more with every interaction and understanding your customer in more meaningful ways. With a successful loyalty program, its a win-win for both the customer and the company.

Customer Loyalty Programs have become a popular way to frequently, instantly and conveniently reward your customers. Programs in all types of formats exist—we are all a member of one or another—from coffee house punch cards to frequent flyer miles. Increasing your customers’ loyalty will yield your company profit over time, will create a following of fans who turn into brand advocates, and will be less expensive than starting a new customer acquisition program.

If you’ve already implemented a Customer Loyalty Program…

…what can you do to boost performance? Here are a few progressive ideas:

• Have you heard of “artificial advancement?” Two consumer researchers conducted a customer loyalty experiment at a local car wash, giving half of the 300 loyalty card-holders an 8-punch card, and the other half a 10-punch card with 2 head-start punches (same concept with an artificial advancement: 8 washes = free wash). The head-start card-holders had a 34% success rate! Long story short? Offer your customers endowed progress when they join, or during special times of the week or month.
• What other options can you provide a customer, other than discounts, points, or free products after purchases? Patagonia, an environmentally-friendly outdoor clothing company, started the Common Threads Initiative, where their current customers can resell their gently used Patagonia gear online through the company website (powered by an eBay engine). Not only do customers have an easy way to resell their unused apparel, but they are assisting in the company’s initiative to decrease their carbon footprint. This type of loyalty program is deeply engaged into the customer experience versus just giving your customer rewards for staying loyal.
• Punchh, a California based software company, invented a virtual punch card that brings that ‘old school’ notion into the technology age, where customers who download a Punchh app from participating vendors receive virtual card punches for bringing referrals in to the vendor, and for posting reviews on social media networks. And of course customers receive “punchhes” for repeat business.

What do all of these examples tell us?

In short, that there are many ways to dream up innovative Customer Loyalty Programs. In simple terms, focus on the following while creating and implementing your Customer Loyalty Program:

• Consider the customer’s experience, not just their purchase
• Offer different ways for your customers to be loyal – punch cards may be still be in use, but so are mobile apps, for example
• Remember the KISS method: Keep it Short & Simple (sure, there may be another acronym for this but for today’s blog we’ll use this one)… Loyalty programs that are easy to follow and use are better for consumers.

For a while, the gym FOB held my attention — scan it enough times at the front door and get a free pair of yoga pants. Once I got the yoga pants, that FOB tag became just like the others, a little boring.

So, when a Market Centre Group client asked my team to create a few new Customer Loyalty Program ideas, we decided to go a bit further than the old key FOB approach.

During our brainstorming session, it was fast and easy to create a list of tired ideas that are part of most Customer Loyalty Programs…

• Get a discount at the register
• Get a “club” email in your in-box
• Get a quarterly piece of snail mail and
• Maybe get invited to enter a special web site

None of these ideas really create COMMUNITY.

Marketers know that creating community is what brings your customers back. Creating community is what keeps your customers interested and it gets your customers to share.

A happy customer that feels part of the community experience at your store, restaurant, office or event is more apt to share that community feeling on social media.

A sense of community turns your customers into a team of virtual marketers.

How can you get your customers to invite their friends to the Community? You need to get away from the tired ideas and add some fun. You can pay a marketing or PR firm thousands of dollars to create a Customer Loyalty Program, but if the plan doesn’t contain a fun attitude, then your Loyalty Program will soon become as interesting as winning a pair of yoga pants.

Our Customer Loyalty Approach

A Market Centre Group client in Virginia, HomeBrewz, asked for assistance in creating Community and creating a Customer Loyalty Program. HomeBrewz is located in beautiful Nelson County, VA and is only miles from one of Virginia’s most popular year-round resorts, Wintergreen Resort.

HomeBrewz also sits in a community shared by other unique retail shops and one of Nelson County’s micro-breweries, Wild Wolf Brewing Company. Park your car and visit unique shops, taste some great micro- brew, dine inside or out and enjoy the views. This client has what marketers call “Site Advantage”.

The Market Centre Group had to capture that fun atmosphere and push it to the Customer Loyalty Program. HomeBrewz sells at-home beer and wine making supplies as well as a large collection of wine and beer themed home accessories.

Soon, the store will add an e-commerce web site for national shipping. The Market Centre Group was tasked to create a Customer Loyalty Program that would not only appeal to those who visit in person but also to those who only purchase online.

The fun atmosphere had to capture those customers that are hundreds of miles away. We needed to create a two-prong approach.

Our team broke down the customer loyalty program into manageable parts:

Guest Blogging

Start a wine and beer making blog and invite club members to be guest bloggers. Let club members share their tips and experiences in home brewing. Guest blogging always builds community. Tie the blog into the new e-commerce web site so far-away customers are encouraged to participate.

Special Events

Host a special event for club members that encourage members to share and swap their bottles with other club members. Of course, the event will be held at HomeBrewz and home brew supplies will be discounted to club members during the event. A fun event always builds community.

Idea Sharing tied to eCommerce

Start a recipe share page. Homebrewers and winemakers love to share their recipes. Again, tie this into the e-commerce web site. Any idea that encourages sharing builds community.

Online Photos and Videos

Again, encourage club members to share their photos and videos. Social Media has been built around the idea of community and sharing photos and videos. I am a home winemaker myself, and a fellow winemaker loves to share her photos of her grapes growing in Canada. It’s fun and always a conversation starter.

Friendly Competition

Have a yearly wine tasting and competition. Let your customers compete to be the best and build a party around the competition. Friendly competition always builds community. For those far-away customers, plan a weekend of fun and provide information on lodging and area activities.

Free Food

Coming together around food and beverage always builds community. The sister store to HomeBrewz, Zestivities, is a distributor for The Big Green Egg. Loyalty Club Members will be invited to visit and taste some gourmet food created in the demo area for The Big Green Egg. (a great cross marketing idea)

Loyalty Club Members Weekly Discount

Tried and True, a discount always keeps your club members coming back. This idea will be used on-site and on the e-commerce page. The Market Centre Group is suggesting a special twist to keep this idea fresh. We will be using a Loyalty Club QR Code. Scan the QR Code weekly to see the club special.

QR Code Marketing

The Market Centre Group is going to build a Customer Loyalty Program that goes beyond the boring key FOB tag. The special club QR Code will appear on HomeBrewz swag. Swag will be given to club members when they visit the store and included in the shipping boxes on e-commerce orders.

The Market Centre Group will create a club member’s mobile website using Myqrosites. The QR Code will also be included on all event invitations, on the web site and even on store receipts.

Mobile and Social Sharing

The Market Centre Group suggested a mobile site by Myqrosites because of the software’s “Share” feature. MyQRosites will let club members share the mobile site on Facebook, Twitter and other social media sources.

Of course, there will be some prize giveaways to club members who share with their circle of friends. HomeBrewz will continue to create ways to get their customers to invite friends to the community.

The Market Centre Group will be using these ideas to create a fun Customer Loyalty Program for HomeBrewz. The program will launch with the store’s new e-commerce site and tie into Summer 2013 special events.

We believe in the benefits of planning and hosting launch events. As a matter of fact, our next blog post will be about Event Marketing.

In fact, recent research shows that of four drivers of customer loyalty (company and brand impact, product and service delivery, value-to-price ratio, and sales experience), 53% is related to the sales experience.

What are some of the key components of the sales experience that will drive customer loyalty?

The sales rep offers unique, valuable perspectives on the market

Your sales team needs to be well versed in your targeted industries, not just in your product line, if they’re to create loyal customers. Ideas to help them get there? Start a book club: Subscribe to industry journals, assign pertinent articles, and discuss. Hold a brown bag lunch and invite customers in to talk about industry trends. Send a rep to an industry trade show and have that educate the rest of the team.

The sales rep helps navigate alternatives

In order to help customers navigate alternatives, sales reps need to know how to uncover customers’ unique problems and needs. Reps need to thoroughly understand what each customer wants to fix, accomplish, or avoid, so that they can recommend appropriate solutions and present the pros and cons of each alternative. In-depth sales training provides reps with the tools they need to uncover the customer’s issues and help the customer navigate alternative solutions.

The sales rep helps avoid potential land mines

Employee retention is key here. Sales reps with tenure can help customers navigate potential land mines because they’ve seen other customers weather similar situations. Paying a competitive salary, providing positive coaching and support, and recognizing achievements—both small and large—will all go a long way toward retaining sales reps over the long term.

The sales rep educates on new issues and outcomes

Loyal customers look to their sales rep for new information, either on industry issues or on products and services that will improve their business. Make it easy for your sales team to keep customers up to date. Create email templates and attachments that reps can easily customize for each customer. Create periodic webinars that your sales team can invite customer to for continuing education. Create podcasts with customers who are solving common problems in unique ways. Partner with your marketing department to help create additional ideas on how to continually reach out to customers with new, pertinent information.

The supplier is easy to buy from

Some companies are starting to measure customer effort—how easy or difficult it is to do business with the company. Think about it. Loyal customers are repeat customers. How likely are you to be a repeat customer if you have to wade through an impossible phone tree only to be cut off, if the sales rep doesn’t return your call, if emails aren’t answered promptly, if quotes are incomplete or inaccurate, if billing is incorrect? The easier it is to buy, the more likely customers are to buy again.

The supplier has widespread support across the organization

Depending on what you sell, after-sale service and support may be more important than the product itself. After all, what good is a highly technical piece of diagnostic or production equipment if you can’t receive timely repair when there is a technical issue or defect? In order to build loyalty, it’s important that the sales team provide a proper hand-off to service and support so that the customer feels secure in knowing that any post-sale issues will be addressed in a timely fashion.

April is customer loyalty month. Use these tips to engage your sales team in the process of creating loyal customers. Your company will benefit, and so will your sales team as they enjoy repeat business and referrals from happy, satisfied customers.

Customer Loyalty Tip #1: Your customer’s problems are your problems

If your attitude toward customer service is that your role is to mitigate damage, or to simply put out fires and move on to the next problem, Customer Service Month is a great time to re-think this thought process.

Customer concerns are no small issue, and if your customer has a problem with your product, service, or the way a problem was handled, consider this your new problem – it’s not just a problem happening to someone else, but it’s an issue that now affects you directly. Does this thought-shift change how you’ll handle the problem? It should. Unhappy customers tend not to be loyal customers for long, so consider how you can possibly solve their problem in a way that you personally would be pleased with. Ask yourself – if this happened to me, how would I want the problem solved? What would be the best possible outcome in this scenario? How would I want the company to respond to me and solve this issue? As much as it’s in your power to do so, act and treat that customer accordingly.

Customer Loyalty Tip #2: Don’t reinvent the wheel, especially when it comes to discounts and rewards

J.C. Penney was once one of the titans in department store sales. In 2012, sales fell by 25% and the former Apple Stores’ leader Ron Johnson, who was hired to spiff up the stores and increase sales, was fired. Among Johnson’s cited failures was that he alienated customers, decreasing customer’s “loyalty engagement levels” to a new low of 70%. (Competitor department store Kohl’s has a level of 84% and Macy’s is at 82%. At 65%, a brand is said to be on its way out.) One major flaw in Johnson’s strategy was eliminating the discounts that customers had relied on – Johnson instead rolled out “everyday low pricing.” With the brand in peril, Myron Ullman, J.C. Penney’s re-instated CEO, is desperately bringing back the deep discounts in hopes that he can lure customers back and once again regain the loyalty of customers who relied on Penney’s tried and true formula. Lesson learned? When it comes to rewarding customers, don’t reinvent the wheel; customers appreciate offers, discounts, and rewards.

Customer Loyalty Tip #3: Remind your customers why they should be loyal

When considering customer loyalty and how your customers feel about your service and brand, never assume that customers remember or even know the large and small ways you are providing service. Keep your brand and service top-of-mind through e-newsletters, personal emails, or even phone calls (depending, of course, on the type of service you offer and the number of customers you have). It’s not arrogant to point out the ways you are helping your customers – it’s simply a good practice. Highlight your rewards, make sure customers know how they can easily contact you if problems arise, and even pick “customer testimonials” to drive home the point that your service is making a difference for other people, as well.

Customer Loyalty Tip #4: Take a tip from a ballpark

If you live in or around the Bay Area and have season tickets to the Giants baseball team games, chances are, you are feeling the love from the organization. To help increase customer loyalty and ensure that fans will come back for repeat seasons, the Giants organization assigned personal representatives to each season ticket holder to ensure that the fan is happy with his or her experience. Yes, you read that right — every person who has a season ticket has the personal phone number and e-mail of his or her very own customer representative. Season ticket holders can sell seats for games they can’t attend, ask questions, or even file complaints if something such as their scanned ticket didn’t work when entering the park. It’s personal service at its best, and it’s just one way that the Giants have managed to keep their fans wildly loyal.

Customer Loyalty Tip #5: Treat your best customers like they’re relatives

Do you send birthday cards to your grandmother, aunt, and/or siblings? How about your customers? If not, why not? When it comes to customer loyalty, if your business involves more personal relationships with customers, make sure you write down their birthdays, anniversaries, and important life events. Send a card, hand-written or personally signed, if possible, and be sure to thank your customer along with your note of celebration or congratulations. Your customers will remember this nice touch.

Now get out there and start building loyal customer relationships!

We hope that during Customer Loyalty Month you put in extra effort to remind your customers just how much you appreciate their business. Post our 5 tips up in a visible place, and practice them, year-round. With persistent attention to your customers, you’ll start to build not just loyal customers, but happily loyal customers.

Create Efficient Customer Service

Customer service isn’t limited to one communication channel. Customers are looking for a business who will respond to them in a timely manner, no matter how they choose to reach out. Your first step should be to ensure your business has a toll-free customer service number and support email address that is easily found on your site and product tagging. Customers expect a response from companies within an hour, especially when they are reaching out on social networks. However, the average response time is just about 13 hours. A Dimensional Research survey found that what makes a customer service interaction bad is having to explain a problem to multiple people (72%) followed by the problem not being resolved (51%).

• Takeaway: Make sure that your customer service representatives receive great training on a regular basis so they can answer service questions in a timely manner the first-time, without having to hand off the call, chat or message.

Concern Yourself with the Customer Experience

The customer’s experience involves every single time they come into contact with your business. In-store or online, each touch point between you and customer needs to be taken into consideration. Harris Interactive and inContact conducted a survey in 2013 that found consumers are less likely to make buying decisions based on brand loyalty, and more likely to choose a company that offers personalized customer experience options. Personal experiences can make a difference and if you offer these up, you can draw in new customers while retaining those you’ve already earned. People talk about the service, experience and products they love… and hate. Be on the receiving end of the positive communications with personal touches in experiences your company offers.

• Takeaway: You’re a business, but customers want a personal experience. Don’t let automation get in the way of showcasing all you have to offer to each individual customer.

As Henry Ford once said, “”A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.” Loyal customers are created when a customer has a great experience and great service. The Dimensional Research survey found that customer service not only affects revenue, but has a long lasting impact as customer service is the number one factor influencing how much a consumer trusts a company. Both those who are just starting a new business and those who are looking to improve the success of their established business need to begin to pay attention to the service and experience they are currently offering.

And Finally, a Reminder…

April is Customer Loyalty Month. Use these tips to engage your sales team in the process of creating loyal customers.

Question by: Ashley

Always Over Deliver

“First and foremost, meet the needs of the customer, then take it up a notch and over deliver. Whether you provide deliverables ahead of schedule, throw in bonuses or surprise and delight with cool new features, continue to give more.”

- Kelly Azevedo | Founder, She’s Got Systems

Ridiculously Good Customer Service

“To quote a recent customer email, “I really appreciate your thoughtful and professional response. I don’t get that a lot from customer service. Usually, it’s scripted nonsense that makes it seem like I’ve done something wrong. You’ve single-handedly improved my perception tenfold. Someone there ought to give you a pay raise.”"

- Matt Mickiewicz | Co-Founder, Flippa and 99designs

Treat ‘Em As You’d Want to Be Treated

“Empower your employees to help customers the way they would want to be helped. Ditch scripts and “company policy” in favor of dialogue and intuitive problem solving. Customers want to be treated like human beings, not sales figures.”

- Vanessa Nornberg | President, Metal Mafia

Try Genuine Transparency

“If you screw up, be willing to openly acknowledge it and take responsibility for it. Always be real with people, and cut out the “robot act.” Show a genuine desire to improve, even if you’re already doing a good or great job in servicing them. Customers really appreciate that sort of interaction, especially when you show you understand them and actually give a darn.”

- Matthew Ackerson | Founder, Saber Blast

Love Them and Thank Them

“As Gary Vaynerchuk says in his book The Thank You Economy, you need to “shock and awe” your best customers. This means actually giving a crap and rewarding them for no particular reason with thoughtful gifts. I agree 100 percent. Are you telling me the best you can do is an automated Happy Birthday email?”

- Patrick Curtis | Chief Monkey and Founder, WallStreetOasis.com

Customer Loyalty Works Both Ways

“If you want customers to be loyal to you, don’t forget to be loyal to them. Focus on your core, die-hard clients. The fringe customers will come and go, but your core will stick with you through the good times and bad. Keep those customers happy at all cost. Customers reward loyalty with loyalty.”

- Nick Friedman | President, College Hunks Hauling Junk and College Hunks Moving

Build a Broader Relationship With Clients

“If the only times you talk to a customer is when you’re getting paid or providing support, you won’t exactly be their favorite person. Creating a broader connection makes you someone that they’ll want to seek out. Something small, like forwarding a relevant article, can be enough to create a positive association, but keep your eyes out for bigger opportunities.”

- Thursday Bram | Consultant, Hyper Modern Consulting

Sincerity, Seriously

“Customer loyalty is, in my opinion, built and substantiated with honesty. But more than honesty, it’s really about sincerity. Clients or customers want to look into your eyes and know that you don’t just mean what you say, but you are what you say. They know that everything you do and say is a part of who you are. Because of that, they know they can trust you, and that keeps them loyal.”

- Steven Le Vine | CEO/President, grapevine pr

Send the Message Clearly

“How much would it mean to you if the founder or president of one of your vendors called you up on the phone to ask you how your business was doing, and if there was any more that they could provide for you? Don’t say you care, show you do. Pick up the phone and make it personal.”

- Benjamin Leis | Founder, Sweat EquiTees

Reward the Remaining Ones

“Make your customers feel special by rewarding them for their loyalty. A thank-you gift, access to an exclusive event, a special offer, they all go a long way. And now, there are many services that can help without requiring a major capital investment. For instance, at Merchex, we’re working with dozens of luxury merchants to identify their best customers and effortlessly reward them.”

- Michael Tolkin | CEO, Merchant Exchange

Keep Their Best Interest in Mind

“I believe the best way to increase loyalty is to only offer people what they truly want and need. If someone isn’t the right fit for my company or they no longer need the services, I tell them. Coming from a place of total authenticity not only turns clients into raving fans, but also wins the hearts of people who are amazed you didn’t try to pressure them into a sale.”

- Elizabeth Saunders | Founder & CEO, Real Life E®

Companies must not mistake one for the other. If customer satisfaction is viewed as true loyalty, then the company tricks itself into believing all is well and right between it and its customers. The scary truth, however, is that many “satisfied” customers are simply tolerating a company’s services until they can find a competitor that offers a better price, service or location.

For every loyal customer who promotes a brand, there is another whose bags are packed, waiting for the next slightly better feature or benefit to come along — loyalty is hard earned and nurtured every day. It doesn’t just come stumbling through the gate.

As I state in my book, The Loyalty Leap, customer loyalty can really be broken down into two kinds: behavioral and emotional. Customer satisfaction falls under the former, but the latter is the most desired. Here’s a refresher about what distinguishes the two types:

Behavioral loyalty reflects purchasing behavior and is often motivated by rewards. Customers who maintain shopping frequency and purchasing patterns are deemed loyal based on average spending behaviors. The customers are content with the service, but if a better option comes along they’ll make the switch without a second thought to the company they’re leaving behind. Behavioral loyalty can be a strong indication of convenience, price advantage or lack of competition, but it can be fragile and fleeting.

Emotional loyalty, in contrast, exists within a sustained customer relationship; when the customer sticks with one brand even when a competitive alternative is available. It relies on the company’s capacity to recognize customers’ contributions directly. Research by the Gallup Organization shows that a customer who is more emotionally loyal to a business is more valuable than one whose loyalty is only behavioral, or due to satisfaction. In fact, emotionally satisfied customers increased their spending by 67 percent over a 12-month period compared with a mere 8 percent among those who were rationally satisfied.

Customer satisfaction should never be mistaken for customer loyalty. And, to that effect, behavioral loyalty should never be thought of as emotional. Customer satisfaction and behavioral loyalty are states of being that may appear good for business but actually conceal deeper issues, such as a desire for a more meaningful brand experience. Only when we achieve customer loyalty is the depth of that commitment revealed.

Don’t fall victim to the Trojan horse; recognize the difference.

Too many businesses focus resources on marketing individual products and services. While that is certainly important to a degree, products will change over time. By contrast, movements – commitments to unwavering beliefs and values – have longevity. A better, bigger, and bolder marketing goal is to create a movement based on your values.

Movements are Built from the Inside-Out

A movement requires that businesses assess what they stand for in the world. You have to be really clear on who you are, on what’s important to you, and what you value. IBM, for example, values contributing to a smarter planet where technology can change lives, build better governments and even reduce food spoilage – and thus hunger. Grasshopper.com is committed to improving the lives of entrepreneurs who create jobs and change the world. How the company does that is with phone solutions. While products will evolve, the company is grounded in what it stands for and why it exists. Tony Hsieh of Zappos.com says, “You must think bigger than your product and your company.” He’s right.

TOMS Shoes is a One-for-One company. Its marketing is a movement. They may sell shoes and glasses today; what people buy into is a larger story about making the world better. When you buy a product, another product is given to a child in need. Patagonia believes in exploration and in pushing one’s physical limits, and it also believes that these human heights are compatible with stewardship of the environment.

Competitors will compete on products and features; a larger story that creates a movement offers customers something bigger that inspires greater loyalty. There is value in belonging to a movement. When you share values with your customers, your relationship is deepened.

The Advantages of Movements

Movements attract the right customers. Product life cycles are getting shorter and shorter, especially in technology. Movements built on common ideals are more sustainable because you attract people who share those values rather than customers who are looking for deals, cheap stuff or simply what’s ‘cool’ at the time. While movements certainly evolve, standing for nothing in a world of change is a good way to be lost in the dizzying morass of customer choices today. When you offer your customer choices based on commitments to something bigger than your company, you connect them to something meaningful and that inspires greater loyalty. In my business, I am committed to marketing that is honest and human – and that means no hype, jargon and BS. This commitment also acts as a powerful litmus test for me. Organizations that don’t value people – employees or customers – and thus don’t share my values, aren’t customers I want. Conversely, if they believe what I believe, they are likely attracted to my message. That’s as it should be. The power of a movement is that it attracts people who already value what you do.

Movements help allocate resources. Companies that clearly know what they stand for are better able to channel resources into right things and say no to the things that don’t fit. Movements based on clearly defined values act as a strategic GPS for where the company is heading. Anything that compromises or doesn’t fit with those values is not something that merits an investment in finite resources.

Movements cut through noise and provide strategic direction. When you know your values from the inside out, you have clarity on your ‘why story.’ Companies that don’t know what they stand for have no story to tell the world. Look at Yahoo! (or should I say, Ya-Who?!) or HP today. It’s no coincidence they aren’t doing well. When you don’t have a great story to tell the world and don’t know what you stand for, how can you create a strategy to get there? Your values operate as a Northern Star that never changes, providing clarity and direction.

Be the ‘Keeper of the Flame’

Movements signal purpose in the world, and your job is to be the keeper of that flame – that deep commitment to purpose that is bigger than your products and your company.

When you know your larger story, you are not as susceptible to customer demands that don’t fit. The problem with defining your values from the outside-in (instead of inside-out) is that customers will come and go, and they are not created equal. If your ideals change constantly based on what others’ value, you are chasing markets that will always change.

Marketing is dynamic; and while many things change, your core ideals shouldn’t. That’s one constant that the right kind of customers – those who share your values – can always count on.

How do you keep the flame of ‘purpose’ lit?

Online coupons can be used to attract new customers who may not be aware of your business and existing customers who either need a reminder to come back, or should be rewarded for their loyalty to help turn them into a champion of your business (especially on social media).

In fact, combined with an effective marketing distribution strategy, coupons are some of the most effective tactics available to you.

Online Coupons Make Customers Happy … Science Proves It

Recent research has correlated coupons directly with brain chemistry linked to happiness. People who receive $10 coupons have 38 percent higher Ocytocin levels, 32 percent calmer breathing rates, 5 percent slower heart rates, and 20x less sweaty palms. You can’t make this stuff up.

And certainly customer satisfaction matters. Happy customers rate you better on review sites like Yelp, FourSquare and Google+Local. They are more likely to come back. More likely to sign up for your email list (quid pro quo, Dr. Lechter) or like your Facebook page. These are all positive outcomes for your business. There are numerous studies that show the impact of positive social media reviews on your business and you should be monitoring and improving your local and social reputation aggressively.

Did you know that 60 percent of people are willing to post about a product or service if you offer them a discount?

How Do You Choose the Right Online Coupon for Your Business?

Choosing what to offer depends on your local business’ economics and what is attractive to customers. We like to start with your cost of acquisition. How much are you currently spending to acquire a new customer and what is their average lifetime value (the profit you see from a customer from their first visit to their last)? Those are metrics that many local businesses don’t track, but can be calculated on the back of an envelope pretty readily.

What would you be willing to pay to get a new paying customer to walk through the door right now? That’s a good baseline.

Then look at how often your customers come back and how much they spend over that time and subtract your variable costs (i.e. the costs associated with every new customer, not your fixed costs like rent). What do your numbers look like?

If you are looking for new customers, you should be willing to pay that much to get them in. Use coupons as the incentive to pay that cost of acquisition. If it’s to increase loyalty, structure it that way like many punchcards and other loyalty type programs. If you want to increase the customer community you can reach via Facebook, Twitter or email, then make that part of the offer.

What are you trying to achieve with your marketing plan?

Make Online Coupons Attractive for Customers Too

On the other side, think about how to make that cost of acquisition attractive to customers. Is it for a new, exciting product? Is it for early access to something special? Is it seasonally relevant (New Years is coming up next week). What cuts through the crowd?

Studies show that there is a vast improvement in effectiveness when you offer at least 20 percent off. In the age of daily deals, less than that is more easily dismissed. Customers also like definitive amounts they can value, like $5, $10 or $20 off. They can understand those offers because they have concrete value.

The Real Coupon Challenge Is About Controlling Distribution

Your most important challenge is not creating the offer, but making sure it gets in front of potential customers. In fact, that’s why Groupon commands half of a pre-paid offer – they have a 30-million email customer email list and you don’t (yet). And that of course is why local Internet marketing is more important than ever.

Local businesses have the ability to command distribution more now than in any time in history. You used to have to spend money on a PR agent, billboard or a large postal mailing to get the word out. Now you have more inexpensive or free online marketing tools than ever including your website, Facebook, Twitter, email and more.

With a little work and a continuous strategy, you don’t need the same paid resources to achieve distribution. At LocalVox, we are always talking about the difference between advertising and marketing. Advertising is an episodic spend to gain traffic, where as marketing is long term strategy to build assets that grow in value over time – your brand, your reputation, your SEO footprint and your distribution channels.

Coupons Improve the Effectiveness of All Your Distribution Channels

Coupons improve the conversion of each and every channel and they should be spread across all of them. On local business websites, we see 3-4x improvements in conversion by putting your coupons prominently upon them. We see similar effects on Facebook, Twitter and email as well as one other important effect – loyalty and retention increases.

When consumers opt in to your email list or like your Facebook page, they want more than just information. It can be a challenge to make every local business update riveting to consumers if it’s just informational. And let’s be honest with ourselves: We all want to feel special. We want the oxytocin release a business can give us by telling us we are special and we deserve a coupon.

By offering them as part of your communciation strategy, they’re more likely to pay attention to the next communication and less likely to unsubscribe. And of course, they are more likely to share a deal than other content – 27 percent of people share deals on social media.

Mobile Geo-targeted Coupons Bring Together Acquisition and Distribution

One great way to use coupons is to combine them with mobile marketing. Our studies have shown that mobile marketing currently has the highest return on investment (ROI) of any channel – even greater than email marketing. Taking an effective coupon as discussed above, you can target people in your zip code on their mobile devices as they walk or drive by or as they sit on their couches browsing their iPads.

A well-designed mobile deal will require an email address to claim the coupon. Those emails can be used for future customers mailings to drive repeat business. Even if an individual person doesn’t initially redeem the coupon (which is a win), you now can continue to market to a highly qualified prospect who has expressed interest in your business – which is a win. Building an email list is one of the most successful tactics local businesses can leverage for marketing success.

Because the mobile ad market has more inventory (supply) than advertisers (demand) and because of its targeting capabilities, we find it to be an opportune time to leverage mobile marketing as a paid channel for distribution.

Go Forth and Coupon!

So that’s the basis of a good online coupon strategy. We think that businesses should always have an active coupon (or coupons) to use across their distribution channels. Local businesses should always be increasing their email lists with mobile coupons, converting more customers on their website with coupons and offering their loyal customers reasons to come back with coupons. It’s a lot cheaper than the cost of acquisition and builds marketing assets that grow in value.

So what are you waiting for? Go forth and coupon!

This post originally appeared on the author’s website.

Trevor Sumner has spent ~15 years as a product and marketing executive for cutting edge technology startups from eCommerce and eBusiness in the late 90s to wireless Internet solutions to most recently consumer platforms and local, social and mobile marketing platforms. He founded LocalVox, a rapidly growing startup in NYC. He is an avid fisherman, a native New Yorker, and has scuba dived in all seven continents, including Antarctica.

When consumers purchase premium goods and services that offer elite memberships or status, they expect to be treated differently than “regular” customers. According to the study, elite status and membership programs are an important factor in building brand loyalty – customers respond well to special treatment, especially when purchasing premium goods and services that are often associated with a high emotional value for the consumer. Think luxury vacations, your favorite sports teams, or even your financial services provider. These are all goods that make people feel important, and when offered special treatment for purchasing these goods and services, customers start feeling emotional loyalty to the brand.

The same study also found that a “personalized incentive” or customer-specific reward is key to any successful customer loyalty program. With loyalty programs and status memberships, premium providers need to offer a reward with value to exclusive members.

Many industries use this strategy of status. Hotel memberships like Starwood Preferred Guests offer members discounted hotel rooms and points for staying at their hotels. Airlines often offer premium lounges and first class upgrades. The American Express Black Card is an exclusive credit card that is offered to VIPs and is invite-only. Rental car companies like Hertz and Alamo offer rewards for repeated use of their company – ideal for business travellers. NFL and MLB sports teams offer seating upgrades and advance ticket purchases for big spenders and elite members. Now, what if in addition to the benefits already offered by preferred membership programs, these programs offered each elite member a unique, customer-specific phone number to call at any time for service and support? Providing a unique phone number to each of your elite customers offers a personalized customer service experience and a feeling that their requests and inquiries are your highest priority.

Customer Routing and Priority Queuing for Elite Customers

With unique call tracking phone numbers you can set up custom routing and priority queuing. Custom routing will get their phone call to the right place at the right time – based on rules that YOU define. If you want each loyalty member to reach their own specific sales or customer service rep, you can set up rules that route their phone number to their unique representative.

If you prefer that each loyalty member phone call to go to your customer service team rather than a specific rep, you can set up priority queuing that places their phone call at the top of your customer service team’s queue, ensuring that elite members receive customer service immediately.

Personalize Premium Customer Experience With CRM Integration

Another way to ensure that your elite members receive the best customer service experience is by integrating their unique call tracking numbers with your CRM system, such as Salesforce.com. With this integration, every time one of your elite members calls using their unique call tracking number, their call will be captured and stored in your CRM. This helps keep a record of every request or inquiry they make – and you can even set up rules that automatically remind your agent to follow up with elite members every time they call in for customer service.

The elite phone numbers can also trigger whisper messages to agents fielding incoming phone calls. The message “whispers” the customer’s name and elite status to the agent before they begin speaking with the customer. The whisper helps the agent provide more personalized service and helps the customer feel special – a key ingredient in successful loyalty programs.

Special Treatment for Elite Customers

When you offer premium services to clients who expect to receive an exceptional level of customer support, it is important to find ways to make your high priority customers feel valued. With a unique phone number for every elite member, you demonstrate to your preferred customers that not only are they important, but there’s value attached to their VIP status.

Selling some deals was exactly what he hoped for, right?? Yes – his daily deal campaign delivered great exposure and some cash, which is always good. However, he was expecting a larger percentage of these sales to turn into repeat customers, which never happened because he didn’t make much of an attempt to convert these one-time transactions to repeat customers. What can we learn from this?

Here are a few simple ways you can entice your daily deal recipients to become repeat customers.

• Before providing services> Ask for email address – Have your customer complete a customer card or online form with basic information before they receive goods or services. Ask for permission to send any email newsletters or offers.

• Immediately after providing services> Upsell on the spot – Just after providing goods or services, simply offer your customer a similar deal as the one they came in for (e.g., Get $250 of lawn care for only $100). Chances are, if the offer was good enough the first time they were presented it, they may just purchase it again directly from you, eliminating the daily deal middleman.

If they decline your offer, they may still return later. Stay top of mind by emailing your offers directly. Include an expiration date to instill a sense of urgency.

• A couple weeks after providing services> Follow Up – A few weeks after you’ve completed the service, send a quick “thank you for your business” message and ask them to rate your business, including how likely they are to purchase again.
You can also ask them to refer your biz to their friends and family and provide a referral incentive by offering a discount for their next service.

Running a daily deal campaign can work to your advantage by helping you get new customers, but it’s up to you to keep ‘em coming back for more.

Have you run a daily deal campaign with Groupon, Living Social, Bloomspot or Google Offers? What did you learn? Share away in the comments.

This kind of universal, or “coalition,” loyalty program is available and quite popular in many countries, including neighboring Canada, but not in the United States. The U.S. market is dominated instead by what’s known in the industry as the single-operator loyalty program.

Why? Around the world, coalition programs thrive with memberships approaching 1 billion, according to estimates by Finaccord, a British market research firm:

* No less than 60 percent of German households participate in the Payback program, where points can be collected at 175 partner companies.

* In Australia, more than eight million people, in 5 million households, are FlyBuys loyalty cardholders.

* And in Canada, the 20-year-old AIR MILES Rewards Program stands as the international benchmark for the operators of coalition loyalty programs. The program, with participants from two-thirds of Canadian households, gives back $500 million in member rewards annually.

Indeed, at AIR MILES, we have learned that the more coalition merchants a member purchases from, the more she will spend with the company that first brought her into the program. So if she entered the program through a drug store chain, and then expanded her purchases to a supermarket within the coalition, she’d actually start spending more at the drug store chain. And her spending will increase exponentially with the number of merchants she shops in the coalition. We call this the “network effect,” and it doesn’t mean the consumer is spending more money overall – it shows that she is concentrating her purchases within the coalition.

All of which makes me wonder why the coalition model hasn’t taken hold in the United States.

My hunch is that the sheer size of the U.S., combined with the regionality of many of its merchants, contributes to its lack of coalition. But that does not explain why the coalition model does not exist on a regional basis. There are also strong themes involving brand focus or control of customer information, which also may explain why large chains such as Safeway, Target and Walgreens are not involved in partner-based loyalty plans.

New, single-issuer programs are launching in the United States weekly – according to COLLOQUY, the average U.S. household is enrolled in more than 18 programs, for instance, but participates in only around eight. At some point, the number of competitors, combined with the consumer’s limited ability to engage in multiple programs, will dilute the impact of “marginal,” single-issuer programs.

Moving forward, the best way for these programs to compete could well be through alliances. Some companies are inching in this direction – we are seeing more enterprises connect their loyalty initiatives through partnerships, such as the Shell and Kroger fuel discount program. But these two-party partnerships are still quite limited from the consumer’s point of view, and my hunch is that to be viable and competitive long term, they’ll need to expand beyond what we’ve seen so far.

The missing component to this change may well be the coalition operator – the company that would hold and manage the data, issue the rewards and sponsor collaboration between the participating companies. I think it is just a matter of time before that changes because the benefits are measurable and the consumer will seek greater value.

We’ll just have to wait and see who are the first companies to see the potential.

As a result, customer loyalty as it existed even ten years ago is largely gone. The majority of customers rarely stay loyal to any one company anymore, regardless of the circumstances.

For example, we conducted a customer experience assessment for a mid-size regional bank, known for—and proud of—its stellar customer service and respected brand. Their loyalty scores and core customer experience metrics are among the best for banks in their market. So imagine how they felt when we discovered each of their customers had relationships with an average of 2.9 other banks—and that they were considered the “primary bank” by less than 60 percent of their customers.

Last time they checked, which was several years ago, they were the only bank for the vast majority of their customers. What gives?  Unsurprisingly, it turns out that an awesome cross-platform digital experience is really important. Customers aren’t looking for “trusted advisors” as much as they are error-free, brain-dead-simple transactions and account management tools.

In a trend we see play out with some regularity, customers’ needs have dramatically changed in recent years, and many are getting what they need elsewhere.  And why not? Alternates are easy to switch to and even easier to find and assess.

Barriers to access have fallen in most every industry, including many that have historically considered themselves immune. Here in the San Francisco Bay Area, you can sign up to buy green power from an upstart called Marin Clean Energy, which delivers “green” electricity at a lower cost through the dominant regional utility’s (PG&E) power lines—its direct competitor.

My point is this: No matter what industry you’re in, you can count on it being easier than ever for your customers to switch. Traditional definitions of loyalty are quickly becoming irrelevant. Blind brand loyalty and trust are things of the past, and “trapped” customers (of utilities, cable providers, health insurers, etc.) won’t be trapped much longer.

That’s why you need to prove yourself worthy of customer loyalty—over and over, again and again.  And you do so by anticipating customer needs, giving them exactly what they want, when and how they want it—while at the same time consistently delivering a superior customer experience across every channel, interaction, and touchpoint.

Getting this right means your customers will be more willing to consider your new product and service offerings (or more of those you already have), and they may even go so far as to recommend your brand. And while this sounds an awful lot like loyalty, they’ll continue to do so…until the moment something better or easier to use comes along, and/or you fail to deliver on the experiences they expect and demand.

The truth is, it’s a qualified, fairly unforgiving loyalty.

The good news is the roadmap to gaining it is crystal clear: Consistently meet or exceed expectations by delivering awesome experiences and give them the products and services customers want and need. How hard is that? Well, it does presuppose you know what these wants, needs, and expectations are. And, of course, you do. Right?

Put another way, your customers may still love you—but they are far from monogamous. Maybe it’s not the relationship you wish you had…but it’s not so bad, once you get used to it. You’ll see. Because you’ll have no choice.

It turns out that lasting customer love and loyalty is more a matter of the heart – of the brand and the customer getting to know one another better – which is why content, brand authenticity and personalization have made such an impact in the last few years, requiring behemoth brands to become, well, more “human.”

Ease of Use Also Lands Long-Term Loyalty

As a recent report shows, multichannel and web-only retailers can also earn loyal customers by mitigating the pain points consumers encounter while shopping online. Intuitive technology and consistent experiences across channels are keys to keeping customers.

As an example, Lowe’s Home Improvement, one of the top scorers in Forrester’s annual Customer Experience Index (CXi ), launched a myLowes website with personalized content to help customers navigate the world of home improvement. The site lets customers ask questions of store associates online and remembers customer purchases – and the content and look and feel mirror Lowe’s social and mobile offerings.

Says Forrester analyst Kate Leggett in a new report, Understand Communication Channel Needs to Craft Your Customer Service Strategy, “Customer service leaders must ensure that consistent experiences are delivered across channels. This means that each interaction must: 1) provide the same data and knowledge; 2) add value to the overall interaction journey that a customer has with a company by providing him with new information that addresses his questions in a timely, accurate, and personalized manner; and 3) reinforce the experience, data, and knowledge delivered in prior interactions.”

Maximizing the Multi-Channel Connection

Social media, mobile and big data are the customer experience trifecta retailers plan to focus on more to improve customer loyalty, says a Edgell Knowledge Network survey:

• 68% of respondents plan to develop more personalized offers through the use of existing customer data
• 64% are looking to focus on improved social media engagement
• and 40% will look to achieve more agile cross-channel integration.

These three focuses rank higher in the survey than introducing or improving monetary rewards programs, or offering discounts or special offers based on exclusive membership plans.

So what are the rewards for retailers who get customer loyalty right? A recent ClickFox survey shows:

• 78% of loyal customers will spread the word by telling others about the brand and their experience
• 69% say they will make more purchases
• and 54% say they don’t consider other competing products or companies.

Forrester calculates that a 10-percentage-point improvement in a company’s customer experience score can translate into more than $1 billion in revenue.

Loyalty rewards will always have their place in this world, but consumers are increasingly telling big brands that they want more than points and discounts can buy – a better, more personalized customer experience, a brand worth telling others that they love.

You’ve heard of mobile-first organizations, those that launch first on mobile devices prior to web. That can be a good idea for some, but being a consumer-first organization is a universal necessity.

Gone are the days of relying on clever messaging aimed at grabbing the attention of distracted consumers. Awareness is easy, right? You can even buy awareness in digital and convince your boss that it’s edgy just because it’s digital. But being a sales-first organization that prioritizes short-term bumps in numbers should not be your goal. Building an army of dedicated, loyal followers should. Today, consumer-first brands are winning consumer loyalty and, as a result, their money.

The music industry is a great example. For decades, the music industry succeeded by making consumers pay for records, tapes, or CDs of pre-packaged music. But as soon as the tools were invented that allowed them to collect just the songs they wanted, the music industry suffered. The blame was placed on cheap consumers who just wanted everything for free. But we’ve learned that that isn’t true. Consumers, and music fans especially, WANT to pay for the things they love. In fact, artists have given away their music, allowing fans to make donations and received millions of dollars.

Amanda Palmer was a street performer turned professional musician who grew a large following and eventually received a record deal. After selling 25,000 copies of her debut album, her label considered it a failure and they parted ways. Determined to prove them wrong, she started giving away her music to her fans with the simple request that they help her out financially. She received almost $1.2 million from an ironic 25,000 donations.

I think there is a story here bigger than the music industry, which, as we all know, has seen the light (if you will) and is again experiencing growth. We’re seeing a dramatic shift in consumers’ expectations that is literally decimating entire industries. In marketing we like to talk about how social media is changing everything. It isn’t. It is simply enabling consumers to be as social as they’ve always been but now with the tools to ask for more personalized service. And that should frighten any company that is ignoring not just social, but more broadly, campaigns that genuinely connect with consumers.

Let me be clear, if your model is dependent on pulling in consumers rather than providing easy ways for them to get your product naturally, you will ultimately fail. Companies that do it right, the ones that connect with consumers and build the tools that make it easy for them to pay for the things they want, will survive. That is the difference between making consumers pay for your product and letting them.

Don’t be that brand. Don’t use social as a channel for more awareness and push messaging. Build loyalty. And then build or leverage tools to help those consumers pay you.

For people, IQ stands for intelligence quotient, which as we know measures our smarts. People with high IQs build rocket engines, discover planets and formulate cures for diseases.

Yet it is the EQ that truly distinguishes us individually. EQ stands for emotional quotient, and it measures our ability to interact with others.

Many of us are strong in one or the other, but if you have both a high IQ and EQ, then you are not only brilliant, you are also able to genuinely engage others in your thoughts and revelations. For those who are trying to sell their new idea, that translates to results.

Not surprisingly, many people with both high IQs and EQs lead companies. As a result, many of these organizations possess them same qualities and use similar principles to guide how they successfully connect with customers.

But for organizations, the IQ and EQ measures have a slightly different meaning. Instead of intelligence, a company’s IQ stands for Insight Quotient, or how it uses the insights gathered from its customer data to better understand and anticipate their needs. When a company properly develops and uses its IQ, it creates the opportunity to make changes that will improve the business.

When it comes to the EQ in organizations, I like to think of the concept of Engagement Quotient. This form of EQ focuses on how companies create meaningful experiences for their customers, based on their knowledge of the entire experience value chain – from initial contact to purchase and beyond.

For companies, having both a high IQ and EQ means they not only create greater engagement, but deeper loyalty. In particular, emotional loyalty – when a customer sticks with your brand even if there are comparable or even more convenient alternatives available.

All of us, when we look across our lives, can recall a few special people who possessed both a high IQ and EQ. And for that, they enriched our experiences. Companies are no different.

We all have the ability to enhance the consumer experience, and to leave a resonant stamp on their memories.

Do people really want a “relationship” with your company? It turns out that most customers aren’t looking for one. A recent Harvard study revealed that only 23% of participants actually want a relationship with a brand. If a relationship grows organically, well, then great. Some prospects just want to date, explore, and have fun first.

Some organizations operate on a belief that frequent interactions will lead to more likes, and, eventually to that holy grail of relationship. It’s the equivalent of propinquity, or a “wear them down” mentality in dating. In personal relationships that approach doesn’t work well. So why do we think frequency operates as online “relationship” currency with impersonal brands we barely know? Imagine marketers saying, “We had a good first date, and now I’m going to call her incessantly.” And, shouldn’t the bar be higher for faceless contact with organizations we just met than for face-to-face encounters?

Sure, there are always the relationships we have because they are convenient, not necessarily because they are going to last. Yet, frequency without chemistry and meaningful connections never leads to a strong relationship or loyalty. It may just lead to a few good “dates” with your organization. That same Harvard study also showed that brand interactions, regardless of frequency, do not lead to relationships. Shared values do.

A ‘like’ isn’t an opt-in for push marketing. A ‘like’ may lead to another date; however, it’s not a buy-in to any relationship. It’s also not an invite to be bombarded with any marketing, let alone to be suffocated by jargon monoxide poisoning. Intense information marketing based on a single great date is like the guy you said hi to in the market that now thinks you’re “interested” and tells you he is looking to settle down: too much info (TMI) way too soon.

So how do we develop that customer relationship? It comes down to trust. We build trust by being who we say we are, and leading with our values, mission, and sense of purpose. A ‘like’ gives us another chance to converse; a relationship develops when chemistry based on shared values emerges. We can’t connect with people or organizations that hide behind jargon, information overload and me-too tactics that short-change the romance and move to a ‘rational’ information-based relationship. There is no “rational” relationship. (Note: read Brainfluence or Predictably Irrational).

Great marketers that successfully romance customers clearly communicate their brand philosophy and higher purpose. Great examples include Grasshopper.com, Lego, Zappos, Panera, Chipotle, and Toms Shoes, for example. B2B can benefit here, too. A great example: IBM’s Smarter Planet initiative. Creating a human, visceral connection is the only way to cut through noise and move towards ‘meaningful’ touches. Not all touches – as in dating – are equal. That first date is about establishing chemistry. Over time, touches should become more meaningful because each subsequent touch reveals more of who we are and what we believe. How else can strangers get to know one another?

Every marketer communicates, few really connect. So before you send out that next email, ask yourself, am I connecting with my prospect in a way that aims for the heart? Yes, data matters; yet a data-only model doesn’t work. Great marketing that succeeds in the long-run deepens the human connection with your audience.

Let’s face it there are some relationships you have for a while and take out for a few drinks, and then there are those you bring home to Mom. Forget interaction frequency, engagement, even “likes.” Turns out that Mom was right – serious relationships always involve an alignment of values and hearts, not minds. So keep frequent data-driven “touches” to yourself.

Why customer retention is important

Acquiring new business always involve huge expenses and time. On the other hand customer retention is much less expensive from marketing point of view. It further adds to company’s value as it:

• Lowers costs of marketing and customer management
• Promotes brand and generates greater value
• Improves sales value by lowering customer’s sensitivity to price change
• Results in improved financial condition

All these factors are crucial for any business, irrespective of size, to succeed in the competitive environment. It is essential to ensure growth sustainability for long time.

Why customer loyalty is diminishing

Today it is hard to find a customer who will stick to a brand for long time. This is because:

• The competition in the market has intensified. Companies are striving to offer more features at lower price to entice customers.
• There are more brands to choose from than before.
• Modern consumers are better informed than the past. Customers are gaining and sharing information on products/brands on various web platforms.
• The social media has promoted a platform where customers can interact among themselves on products and services, experiences with brands etc.
• Customers are now more influenced by their peers than before while deciding on brands.
• The spending habits of the consumers have changed considerably over the years.

How CRM can help with brand loyalty

CRM offers a unified platform where you store a trove of information on your customers. This information can be extracted and analyzed to build a business strategy that will ensure long term growth.

Know your best customers: Customer relationship management service software solutions can be used in gaining insight on customer behavior and learning about his history with your company. You can get information on:

• How long he has been with you
• What products/services he has purchased
• How often he has made purchases
• How many times he has upgraded his services during the life cycle of a product

You can use this information in planning a targeted marketing campaign. Most CRM software solutions will let you organize and conduct targeted marketing campaigns, such sending email newsletters to targeted group of customers informing them about new products and services or updating them on existing services plans pertaining to their interests.

Anticipating business growth: Once you have enough information on your current business situation you can plan ahead and set targets for future. The data from the CRM helps in understanding your current and future prospects, let you fine tune your marketing strategy and reinforces your relationship with your clients. It is also important in knowing if some of your contacts need nurturing.

It has been observed from market trends that brands tend to lose about 10% of their customer base yearly even after successful branding campaign. So, the information from the software will help you in learning about your current business size.

Forging brand loyalty in new customers: The software help you track how a contact has been managed. Winning customer loyalty is all about creating favorable images of yours among customers and only then you can expect them to talk about you. You cannot win customer loyalty by providing poor and untimely services.  Since the software integrates all aspects of customer management, namely- sales, marketing and services, it let you track the interaction you had with a particular contact. With the help of the information you can even turn a negative situation into a positive one.

CRM is not a standalone software. But it is an essential business strategy.  It is about service. No business can go unaffected, no matter how big it is, by losing its most loyal customers.  CRM software induces professionalism in handling your contacts so that you can grow your business by simultaneously retaining old ones and winning over new customers.

Think about it. The relationship between a company and its customer is a collaborative bond, after all, fostered through meaningful and well-timed communications and recognition. Without reaching the consumer with the well-pitched message at the desired time and in the right place, a company cannot secure relevance and prosperous interactions.

Of course it is not an easy task, which is why the path to relevance lies not beyond one magic door, but four, all of which reveal insights that can be used at different times or in the aggregate.

These doors open to four key behavioral dimensions of the consumer that together will make your message STIC:

Spatial, which refers to the physical location, such as the neighborhood, in which the customer lives, his or her daily travel routes and the places where he or she does business;

Temporal, which in the most basic sense means timing but can also be expanded to reflect a big lifestyle shift such as a new baby, a move to a different state or a career change. But they also can be rather small, such as a home renovation project or a family reunion;

Individual, which reflects the consumer’s unique/personal interests, passions and values, from motorcycle riding to recycling;

Cultural, which includes any ongoing activities that regularly group people together. In addition to the standard definition of race, religion and even sexual preference, it includes any committed action or lifestyle choice that defines a person’s activities, from triathletes to churchgoers to avid sports fans.

Once you master the tools of responsible data collection, you will be able to better appreciate and recognize your customers as they move through these four doors.

The store layout was cumbersome, she said, and the employees were ill informed. The prices were not that great and she was often overcharged on sale items.

Yet every week she returned to this store, and she also used her loyalty card, which recorded all of her purchases, even though the coupons she got in return were rarely for products she purchased. She estimates she spent anywhere from $80-$100 a week at this one location.

My friend was hardly loyal to this merchant. But I have a hunch that based on her shopping patterns, this merchant felt for sure she was loyal. In fact, I bet a lot of companies measure and count “loyal customers” based on repeat business and longevity.

But it would be a mistake to confuse repeat business with customer loyalty, or intimacy. Repeat business may be the simple result of a variety of functions: location, price, service or product. It also is likely be driven by routine, needs and availability.

Customer intimacy, however, is when a customer chooses to stay with your brand even when an equal or potentially better alternative is available.

How is customer intimacy achieved, then? My guide can be found in four basic, but crucially important, steps:

1. Build Emotional Loyalty: Know what your best customers love about you and build on that.

2. Assure You Are Relevant to Your Customers: Resonate with you customers through a differentiated experience.

3. Use Data Responsibly: When consumers share personal information with you, they are entering into a value exchange. Give them something of worth in return for the data they give you.

4. Make the Loyalty Leap: Get organization-wide commitment to redirect your focus from the product to the consumer.

Follow these four steps and you should be able to hold on to your customers even in the face of worthy competition. Take my friend. She eventually dropped her nearby supermarket in favor of a merchant that sits more than five miles from her home and is no less expensive. But the shopping experience is so much more enjoyable, she said, she doesn’t at all mind the drive.

I will delve deeper into each of these four steps in future posts. Stay tuned.

So how do we get people hopelessly devoted to our own brands and businesses? At the New Media Expo in Las Vegas, Dino Dogan, founder of Triberr, spoke about brands with cult-like followings. According to Dogan, the only difference between establishing a cult and customer loyalty, is the intention. Here are his three insane loyalty-creating principles:

1. Create Polarity

Polarity is the concept of us vs. them, good vs. evil, yin vs. yang. Dogan explains that putting your foot down, causing some controversy, and taking a stand doesn’t always come easy, but it’s important in creating customer loyalty. “It requires balls to declare what you stand for,” Dogan says, “So be comfortable with making enemies.” An example of polarity amongst brands? The Pepsi Challenge. Remember those commercials in which people did blind taste tests of Pepsi vs. Coke? This was PepsiCo creating polarity by taking a stance, declaring war in a battle of the brands, and gave Coca-Cola a run for its money.

Dogan also pointed out the witty, polarity-driven ads by Apple: ‘Get a Mac‘ aka “I’m a Mac, I’m a PC.” The ads depicted Mac (played by Justin Long) as young, hip and knowledgeable where as PC (played by John Hodgman) was obviously older, complicated, dowdy, and outdated. The ads forced customers to take a stance: Do you want to be smart, young, hip, and sleek, or simply a square? The power of polarity!

2. Create an Avatar
Now we’re not talking about transposing yourself into a giant, blue, genetically engineered body of the Na’vi – If you’ve never seen the movie, “Avatar,” that simply won’t make sense. But what Dogan is saying, is to visualize your customer, be culturally relevant and significant, and build your brand around them. Who is your customer? What’s his/her age, gender, demographic, occupation, marital status, desires, needs, etc. Understanding your audience is the key to gaining their loyalty. Want to take it a step further? Be your customer. Dogan explains that being your own customer is “absolutely the best way to understand the mind of your customer. Everything else is sub-par.”

Pinterest is an excellent example of a brand banking on its customer avatar. According to Dogan, Pinterest was developed with a specific audience in mind: Female, 25-35+, from Middle America, makes 50K+ a year, etc. Pinterest’s customer profiling certainly paid off, as it’s the fastest growing social network in the world.

3. Create Status
What do people desire more than owning ‘stuff”? If you said, “love,” that’s sweet, but the answer is actually: Status. Dogan explains that “we’re status seeking animals,” and the urge for maintaining a high profile status is strong, whether we’re aware of it or not. Dogan’s first example of a brand establishing status: Girl Scouts. What do sweet, innocent little Girl Scouts have to do with status? Look at all their badges! When I was a Girl Scout back in elementary school, I did just about anything and everything to gain one more precious, embroidered badge to display on my green sash. Having a plethora of “flare” is a big deal, and the more I obtained, the higher the status in my thin mint-slinging world – It works!

Dogan pointed out that airlines are the ultimate status-creating pros. Skymiles, Frequent Flyer Program, Rapid Rewards – You choose devotion towards a particular airline, and the flying world is your oyster. Quick security check? You betcha! Priority boarding? Yes please! VIP treatment? You got it! Members belonging to an airline’s loyalty program get major benefits, but the biggest one allows them show off their VIP status by smugly strolling past a long line of non-member minions for priority boarding.

So now that you’ve gained insight into brands’ cult-creating ways, do you agree or disagree with Dogan’s insane customer loyalty principles? Share your thoughts!